- PENGASSAN has warned that a new Executive Order on oil revenue remittances could lead to job losses
- The directive mandates the direct transfer of royalty, tax and profit oil to the Federation Account
- The union is calling for urgent consultations to prevent job cuts and protect investor confidence
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised concerns over possible job losses in Nigeria’s oil and gas industry following a new Executive Order issued by President Bola Tinubu on revenue remittances.
Source: UGC
The directive restructures how oil revenues are transferred to the Federation Account. It mandates the direct remittance of royalty oil, tax oil and profit oil, effectively ending the 30% management fee previously retained by the Nigerian National Petroleum Company Limited (NNPCL) on profits.
FG justifies oil revenue restructuring
The federal government has said the measure is aimed at improving transparency and strengthening statutory allocations to the three tiers of government.
In a statement by presidential spokesman Bayo Onanuga, the government argued that the order would reduce discretionary retention of funds and enhance accountability in the management of oil revenues.
PENGASSAN warns of job losses
However, oil workers have warned that the policy shift could have unintended consequences for employment.
Speaking in Lagos, PENGASSAN President, Festus Osifo, said the restructuring may destabilise operations within the sector, particularly at NNPCL, and could lead to significant job cuts if not carefully implemented.
As reported by The Sun, Osifo noted that while the union acknowledges the government’s intention to strengthen fiscal accountability, workforce stability must also be considered.
“If not properly managed, this could lead to job losses that will affect thousands of families,” Osifo said.
He noted that the oil and gas sector remains central to Nigeria’s economy, contributing a major share of foreign exchange earnings and government revenue. Osifo cautioned against reforms that could weaken investor confidence or disrupt operational stability.
The PENGASSAN president also referenced the Petroleum Industry Act (PIA), enacted in August 2021, which he said was designed to provide regulatory clarity, boost fiscal transparency and restore investor confidence after years of declining investment.
Sudden policy changes signify unpredictability – Osifo
Osifo explained that the law was developed through consultations with stakeholders and lawmakers to stabilise the industry and attract global capital. He warned that sudden policy changes without broad engagement could unsettle investors, especially in a competitive global investment climate.
“There is intense global competition for investment capital, and policy clarity helps Nigeria remain an attractive destination,” he said.
He stressed that protecting jobs across the oil and gas value chain, from upstream exploration to downstream services, should remain a national priority.
Source: Facebook
PENGASSAN calls for stakeholders’ engagement
PENGASSAN has therefore called for urgent consultations among government officials, regulators, operators and labour unions to ensure that implementation of the Executive Order does not negatively impact employment or investor confidence.
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“Excessive deductions”: Tinubu scraps NNPC’s 30% management fee on profit oil, gas, gives reasons
Osifo urged policymakers to engage labour leaders before taking further steps, saying reforms should support growth, efficiency and national development.
As the new revenue framework begins to take effect, the union maintains that dialogue will be crucial to balancing fiscal reform objectives with the need to safeguard jobs in one of Nigeria’s most strategic sectors.
Tinubu scraps NNPC’s 30% deduction on profit oil
Legit.ng earlier reported that in the executive order recently signed by President Tinubu, he has eliminated the 30 per cent management fee previously retained by NNPC Limited on profit oil and profit gas.
The federal government argued that the dual deductions significantly reduced revenue available to federal, state and local governments under the PIA.
An inter-ministerial implementation committee has been set up to oversee compliance and ensure effective execution of the directive
Source: Legit.ng